2024-03-16 09:58:42
▲ETFs triggered a nationwide rush to buy, and also raised concerns about excessive “excess savings”. To this end, the central bank mentioned three solutions in its report today (16th). (Photo/NOWnews file photo)
[NOWnews今日新聞] ETFs triggered a nationwide rush to buy, and also raised concerns about excessive “excess savings”. To this end, the central bank mentioned three solutions in its report today (16th), including increasing the private sector’s participation in public construction (BOT) to boost private investment, and promoting the Relevant infrastructure construction; it can guide private funds to develop financial services and wealth management businesses, improve the productivity of the financial industry; and make good use of excess savings to conduct cross-border mergers and acquisitions to consolidate its position in the global value chain.
The Uni-President Taiwan High Interest Momentum ETF (00939) was established with a huge scale of 53.1 billion, and the craze continued to Yuanta Taiwan Value High Interest ETF (00940). Since they are all allocated monthly, and the issue price of 00940 is only 10 yuan, it caused ” “National rush for ETF movement”, there are even reports that many people want to withdraw time deposits and mortgage their houses to buy 00940, and even rush to remit money without knowing what the situation is. This also makes bankers go crazy, and the remittances handled exceed 10 million yuan.
At the same time, it also raises concerns about “excess savings” and worries that the flow of hot money to the stock market and real estate market may bring the risk of asset price bubbles, slow consumption growth and weak investment, which will be detrimental to the country’s economic development. Next Monday (18th), Yan Zongda, deputy governor of the central bank, will give a report to the Finance Committee of the Legislative Yuan on the topic “From the hot sales of ETFs, we can see how the government can improve investment channels to guide private hot money and avoid excessive investment of hot money in the housing market.”
The central bank pointed out that Taiwan’s current account has been running a long-term surplus and excess savings have continued to accumulate, resulting in sufficient domestic funds. The central bank further stated that Taiwan is a small open economy and its economic growth momentum is highly dependent on foreign demand, resulting in a long-term current account surplus. The current account surplus reflects excess savings. The two are two sides of the same coin.
The central bank stated that Taiwan’s national savings rate is much higher than the domestic investment rate, causing excess savings to continue to accumulate. In the past 10 years (103 to 112 years), the excess savings rate has continued to exceed 10%. In order to solve the problem of excessive excess savings, funds can be well utilized to invest in domestic and foreign entities to promote balanced economic development. There are three relevant methods.
The first is to increase the capacity of the private sector to participate in public construction (BOT) to boost private investment, and to promote related infrastructure construction in response to the trend of declining birthrate, aging population, and net-zero emission goals. Second, in response to the high household savings rate, private funds can be guided to develop financial services and wealth management businesses to enhance the productivity of the financial industry. Third, Taiwan has limited resources, so it should make good use of its excess savings to conduct cross-border mergers and acquisitions, obtain key technologies and strategic resources, assist manufacturers in global layout, and consolidate their position in the global value chain.
The central bank emphasized that all government ministries will actively cooperate and work hard to guide the effective use and management of private hot money. The central bank will also continue to use various monetary operating tools to promote the effective allocation of credit resources and reduce risks in the financial market and real estate market. To facilitate the long-term and stable development of Taiwan’s economy and finance.
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